Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd.

Background

A group of movie studios, record companies, and other copyright owners sued two companies that gave away free peer-to-peer file‑sharing software. The software let ordinary computer users connect directly to each other and download digital files. Discovery showed well over 100 million copies of the programs were downloaded and billions of files circulated monthly. The plaintiffs said most activity was unauthorized sharing of copyrighted music and movies. The companies marketed themselves to former Napster users, earned money by selling screen advertising, and did not filter or block copyrighted material; MGM also identified millions of copyrighted files available on the networks.

Reasoning

The central question was when a distributor of dual‑use technology can be held responsible for users’ copyright infringement. The Court held that if a distributor acts with the object of promoting infringement—by clear expressions or affirmative steps to foster unlawful copying—it can be liable for third‑party infringement even if the product also has lawful uses. The Court explained that Sony’s safe harbor for products capable of lawful use does not bar liability when the record shows purposeful inducement. The Court therefore vacated the Ninth Circuit’s grant of summary judgment and remanded for further proceedings.

Real world impact

The ruling lets copyright owners pursue distributors who intentionally promote mass unauthorized downloads. Software makers and advertisers that rely on heavy infringing use may face injunctions and damages if a finder of fact concludes inducement. The decision is not a final merits finding; the case returns to lower courts for further fact‑finding and remedies.

Dissents or concurrances

Two Justices wrote separate concurrences. Justice Ginsburg stressed factual disputes about contributory liability. Justice Breyer emphasized protecting innovation and discussed Sony’s role in balancing interests.